As I’ve been mentioning, the S&P 500 continues for form a “Rounded Arc” formation which appears to be the dominant technical structure on the S&P 500. Let’s take a quick look at this development.
What literally leaps off the chart is the multi-swing negative momentum divergence that has set-in prior to the 1,100 highs (so far) in the S&P 500. Negative divergences often precede (or forecast) price reversals - moreso multi-swing divergences.
A simple divergence is one thing - multiple divergences are another.
In addition to the divergences, we see price itself structured in a “Rounded Reversal” or “Rounded Arc” pattern beginning with the October lows near 1,020.
Except for one minor blip, the price has remained completely contained within the upper and lower arc as shown above - that takes precision and balance… and also forecasts the road ahead for prices provided we stay within these arc trendlines.
It would seem as if an up-move was the next likely short-term move ahead in the market (bouncing off support of the lower arc trendline and the 200 period SMA on the 60min chart) - perhaps to the 1,080 range, however should sellers step up and force price outside the lower trendline (where we are now), then we would see an acceleration to the downside and a potential collapse back to 1,020… but we’re not there just yet.
Continue following this structure as well as the upper and lower ‘arc’ trendlines as shown above.
This chart - along with more analysis as to the current structure and opportunities - is included in today’s 9-page PDF “Idealized Trades” report for subscribers.
Daily Idealized Trades reports serve two functions - first to teach intraday trading through explanations of numerous examples of intraday trade set-ups, structure, and opportunities; second, to include ‘forecasting moments’ such as the chart above where we look at current structure and assess possible opportunities into the next trading day.
Visit the “Idealized Trades” information page for sample reports and subscription information.
Corey Rosenbloom, CMT
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